Franklin FTSE India ETF

FLIN

Market cap $2.5B

Brokerage firm Bernstein has retained its "Neutral" stance on Indian equities and maintained its year-end Nifty 50 target of 26,000, implying an upside of around 10% from Friday's closing levels. However, the brokerage cautioned that a combination of weak macroeconomic conditions, earnings downgrades and a revival in equity issuance activity could limit gains even if markets receive a near-term boost from easing geopolitical tensions.

India is likely ​to see below-average ‌monsoon rains for the first time ​in three ​years in 2026, ⁠the government said ​on Friday, ​stoking concerns over farm output and growth ​in Asia's ​third-largest economy.

Indian stocks are on track for their first annual decline in more than a decade, according to a Reuters poll of equity analysts, as sustained foreign investor outflows and limited participation in the global artificial intelligence (AI) rally weigh heavily on market sentiment. Benchmark equity indices in the world's fastest-growing major economy have underperformed most global peers this year.

The Reserve Bank of India's three-year dollar/rupee buy-sell swap auction received strong investor demand on Tuesday, with total bids reaching nearly $10 billion, almost double the size of the auction. The central bank accepted 141 bids in the foreign exchange swap auction, while receiving a total of 254 bids worth $9.8 billion.

James Thom, Senior Investment Director of Asia Equities at Aberdeen Investments, doesn't believe that the current weakness in the Indian rupee is a repeat of 2013 'taper tantrum' scenario. He adds that some level of government intervention is needed to shore up investor confidence in the country's currency and equity markets.

Asia's smaller companies have delivered stronger returns than the region's large-cap stocks over the past five years, while also offering lower volatility and broader sector exposure, according to HSBC Asset Management. The firm said Asia small-cap stocks outperformed their large-cap counterparts by nearly 3% annualised at the index level over the period.

Some parts of India are grappling with power cuts as record-breaking heat has pushed electricity demand ​to an all-time high in excess of 270 gigawatts, spurring a ‌government call for consumers to limit use.

Indian capital market stocks have emerged as one of the strongest-performing pockets of the market over the past year. The muted benchmark index performance has done nothing to limit the rally.

India has asked ​the U.S. ‌to extend its ​waiver on ​Russian oil, Bloomberg ⁠News ​reported on Thursday, ​citing people familiar with the ​matter, ​as the ongoing ‌conflict ⁠in the Persian Gulf disrupts ​energy ​supply.

Indian travel stocks came under pressure after Prime Minister Narendra Modi urged citizens to avoid unnecessary foreign travel, cut fuel consumption and defer gold jewellery purchases for a year, as the government sought to ease pressure on the rupee and contain rising import costs. The remarks, delivered on Sunday, were framed as a national appeal rather than an immediate policy change.